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Your Business

News/Business. A focus on issues facing small business in the United States.

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00:30:00

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Us 6, Msnbc 2, Barbara 2, Joe Biden 1, An American Express 1, Barb 1, J.j. Ramberg 1, Webb 1, Gameification 1, Hablg 1, So Barbara 1, Washington 1, Joyce Finnegan 1,
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  MSNBC    Your Business    News/Business. A focus on issues  
   facing small business in the United States.  

    January 19, 2013
    2:30 - 3:00am PST  

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now washington's tax deal affects you, a small business owner. why managing your stock is crucial. it's time to make money, coming up next on "your business." ♪ small businesses are
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revitalizing the industry. that's why we're proud to present "your business" on msnbc. hi there, everybody, i'm j.j. ramberg, welcome to "your business." for small businesses, the uncertainty of last year carried over into 2013. the good news? the national federation of independent business was up slightly in december. the bad news is it is still at recession levels. the deal negotiates by vice president joe biden ends the tax holiday and increases capitol gains tax rates.
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how will this impact your small business? we have barbara who is an attorney. she is the writer of the monthly news later "big ideas for small business." and also author of "1001 tax deductions and breaks for 2013." great to see both of you guys, thank you for joining us. >> pleasure. >> there's a lot going on. i read an article that said frustrated, elated, happy, confused, those are all reactions. i want to talk first and foremost about the payroll tax holiday. there's no uncertainty about that. employees will be paying more out of their payroll, is this something you discuss with your employees? >> we haven't discussed with
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them yet. i think we were waiting first to see what would happen. our plan is to discuss it with them right before they receive their first paychecks that there will be a change. there is a 2% additional tax coming out, and we'll work with them if there's any type of problems. >> do you talk about this, barbara, our just assume everybody knows? chances are people will get their paycheck and wonder why i'm not getting as much money. >> they may be surprised, but they may be well aware of the change. they don't have to do anything. there's nothing required of employees because of the new law. however, some employees may want to file new w 4s with priors to
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change their holdings. >> some issues are still unresolved. how worried are you, barbara, that taxes may go up, that their expenses may go up? >> all possibilities are really on the table. clearly they could come back and attack various tax breaks or loopholes that are there, but we really don't know. it's likely that nothing will be changed nor 2013. and that any changes will take effect the following year. so at least duo have some luxury to plan and budget for this year. >> small businesses, some would say, got off easy in this deal. a lot that could have gone away, some of the expensing, depreciation, r and d credit
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that many of our viewers may be using stay through 2013. so barb, how do you feel right now? i know one of the deals for you was taxes would go up for people making under 400,000. what are you worried about if anything? >> first is the tax extenders making sure that at some point they become permanent. we were in a situation where we were very lucky there was some bipartisan, and we moved from being a $200,000 to a $400,000 cap. that helps many small business owners. some will be affected by it, and one of the things that is important is having those tax extenders become permanent to plan for the future. >> are you worried about a surprising tax break that you're getting disappearing? >> i think the r and d aspect
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also with section 179. there are certain things that yes, we look at and we make decisions to spend money and put it back into the economy. and if those tax extenders were to go away, we would have to withhold on making purchases that would be put back into the economy. >> and that means you can white up the entire cost of a purchase. >> okay, so barbara, what should we be doing to plan for this uncertainty? >> well, the good news as i said was at least for 2013 we would know what the rules are and certainly take full shrank of them. clearly as you're getting towards the end of the year, if you're considering making equipment purchases, take advantage of the rules that exist now. >> barb and barbara, thank you
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so much. it's been a difficult time to figure all of this out, and we appreciate you coming on and recapping what we can expect. >> how much do you need and when do you need it? those questions are constantly on the minds of customers. once the orders come in, you have to make sure you have the inventory you need to fill them. >> this industry kind of went from a kitchen table enterprise to a much bigger operation. >> we always try to project where people's minds will be at a given time. we try not to fly by the seat of our pants. >> the owners of special lingo.
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>> a seed balm is a mixture of seeds, organic mixture, and clay. what started as a request from smaller retails turns in tales at places like restoration hardware. >> it just kind of happened overnight. >> with so much growth, the pair knew they needed to change the way they handled orders. the old way just would not cut it any more. >> we would buy them in five pound increments, make that much, and sent them out. >> it was a matter of figuring out how do we scale this up? how do we keep a grasp on it, stay organized, and saying okay,
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we need 100 times what we had last too many. it's a matter of having the parts that go into the whole on hand, or accessible to us is the biggest thing. >> the goal is to be able to accommodate any and all orders that could come in any time. >> i think it's a small business model and we respond to order the if they come, we make a little extra, and then it's gone. >> we always hope those reserves is not too much more than what is needed, because we prefer to turn it around quickly. >> we always try to keep 150 to
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300 units of our most popular. >> knowing their customers and when they'll place their orders is important. >> smaller retailers want their stuff quickly because they don't have to plan ahead, and they don't have storage. so they order as needed and they expect it when they need it. >> they definitely require more attention. >> we have a finite amount of space and strength, and everything is done by hand. >> we can hang on to produced seed bombs within and then screen print the pouchs is put
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it together very quickly. >> ideally, production takes a few days. >> we let them air dry for a minimum of two days, ideally three days. >> finding multiple suppliers helps with the work flow. >> if we do need something overnight, we can get it overnight and respond as quickly as possible. >> they found a you need balance between the number of supplies and the products they make. >> it's a consistent recipe, but we might sad something special here or there, whether it's herbs or wild flower seeds -- >> it allows for flexion nblt
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p -- flexibility. >> of course it doesn't mean there isn't wait. managing inventor is not a perfect science. >> we want to never sit on inventory for too long. so we don't produce infinite inventory, even though we could, because it has a shelf life. >> rather than ship it out and have a customer that's disappointed, you know it's the right business decision to get raid of the product. >> the bex advice they can offer is to not overthink anything. he believes a little strategy and occasionally some lun, will allow you to manage your inventory. >> there are fewer pieces that you have to think about, guess about, and figure out.
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the better you are to respond to whatever comes up. inventory can be a big hablg, but so many small businesses have failed but they overestimated or under estimated their inver tirntorinventory. we have two guests with us now. both of them have a lot of experience with inventory. how do you figure it out. when you're bigger you get it, you have repeat customers and a formula, but when you're starting out and small, how do you figure it out so your capital is not all tied up in inventory. >> it's a very delicate balance. an understanding of how will you
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have your distribution, is it through stores with consistency, or a big pr push so you will have traffic to your website, which could upset the balance if you if have a great push in pshlgs pr, it's an exciting thing. it's a hard formula for anyone to truly get. i urgent, for a lot of small businesses, when they have a overflow like they were talking about here, to reach out to the daily deal sights. it's a way to get rid of their inventory while building a brand. you want to do the companies with short leads. if you don't, you can work with those for long leads, and every quart ter could be a way to empty out your inventory. but the reality is, that's what
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you're going to sell it to retailers for anyway. so it allows you to drive traffic to your website. >> i think the name of the game in the early days is to own as little inventory as possible. you should be focussing on building your brand, marketing, getting customers, and optimizing your inventory. if you can reach out to manufacturers, supply base, vendors, get them to work with you, help them finance your inventory, through credits, or any variety of ways. for us, primarily, it's consigning inventory. let us put it up on our website. you hold it, when we sell it right away we'll take it from you. >> is that easy to find someone to do that? >> it spends on the industry and
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the market. you're an entrepreneur, sell your vision to somebody, and you leverage that. say we're this tiny company, but months from then we're ordering in tens of thousands of units. if they see upside and promise of that they will want to take the ride. >> billing clients, tracking hours and expens can be incredibly easy or disorganized and a time sink. so here are the top five ways to the art of invoicing. number one, use a contract. two, invoice early and often. the sooner you get the invoice to your clients, the sooner they'll pay you. itemize your invoices, be as
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clear and specific as possible. if a client doesn't understand the charges, they less likely to sign off on the invoice promptly. four, know who pays you. who signs the check and processes the payment. it will come in handy if you need to address any outstanding invoices in the future. number five, follow up on outstanding payments. send a reminder on the due date and once a week until payment is received. >> when we come back, suggestions on how minority business owners could receive certification. plus ideas for getting customers back in your stores after the holiday shopping rush. we've all had those moments. when you lost the thing you can't believe you lost.
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when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card. spends like cash. feels like membership.
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that's week we profiled a company using gameification. so we asked you to submit your entry for the messiest desk. the winner is joyce finnegan. she'll get to add to that mess by winning a copy of our book "it's your business" and a coffee mug pl congratulations. this week we want to see out there has the best business logo. do you want to play? go to the msnbc "your business"
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facebook page, and enter a picture of your small business logo. the winner will get a bunch of your business goodies and a call from me where we'll talk about your company and challenges your facing. the shop small movement got a lot of attention on the holidays. this year, we're introducing a new segment aimed at maintaining that excitement all year round. in today's shopping small, we have tips to help you outshine the big box stores. you can find him online at small town marketing dot com. >> you gave us one of my favorite tips, and you said under price them, which of
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course, people's first reaction is how will i under price walmart, for instance. >> yeah, your mom and pop scores can't compete with the walmarts of the world, so you can compete with them for a short period of time, like an afternoon, or for a few hours, so a couple quick things about sales though, they can be dangerous in small downs, small communities, and small markets. if you have a 30% margin, and your selling an item for 20% off, you will have to sell twice as many of the items to make the same money. >> right, or maybe you just use it as a leader to get people in the door and you wow them with your other services.
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what about holding a annual grand opening, could it be weird? >> when you drive down main street, all of the businesses tend to look alike. when i first moved to boseman i found out our population turns over every seven years. your worst day of business, normally, is your first day of business. so what do you do? you have a grand opening. so why not reach those people, and this works particularly well if there is an event in town. a county fair, or something like that, to draw these people in. >> provide coupons for shopping, where i get $10 for myself and also for a friend, is that right?
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>> yes, it's a shop with a buddy coupon. restaurants have done this forever, buy one get one-half off. a customer comes in and buys something, they take this with them, so the next time they come in, they will hopefully bring a new customer with them too. >> you talk about employees, an amazing marketing tool if you use it right, right? >> yes, employees are very important in building your business. that's how many people your employees know, and -- >> you should give them. >> you need incentive for those employees to bring people in. every employee should have business cards an incentive to
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pass those out. >> and beat the competition by packaging. >> if you just advertise a single item, it's easy to go online and get the price of that item if you package things together, it's harder to do. mcdonald's does it with a value meal. you can do the same thing. a digital camera with a case and an extra card, and other extras or things like that. we're selling value, we're not selling just the item itself. we're also trying to increase add on sales. >> because once again you can't beat some of the big stores in price. tom, thank you for coming on. smalltownmarketing.com is where we can find more of your tips, have a great day. as we saw earlier, tracking all of the moving parts can be
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overwhelming. if you're looking for a way to help take care of your inventory, look at our app of the week. you can use it for free. time now to answer some of your business questions. the first one is about getting more customers. >> how can we better utilize our referral network of past clients that have been successful with the work we have done through social media or the telephone? >> how do you get your happy customers to be your marketers? >> first to get testimonials. people trust other people. so put those testimonials on your website. get photos, success stories, case studies, whatever you possibly can. success stories, marriages made,
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photos, and put them on all of your marketing channels. the webb, social media channels, this is a success story of the week, fan of the week, and really let them get you new people. >> so now you built up your own site, how do you get them to tell their friends? >> i think also to that point, test monoyals are always the most prominent and credible way. video too. video allows somebody to hear the story in about 30 seconds, but having the photos and video adds a sense of credibility. also. having a conversation, if you could reach out to your customers, say let's have a conversation, talk about your experience, so your friends can see what you're saying, my customers see what they're saying, that's another really incredible way to get people engaged in a conversation and
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watch what is in the story behind it. >> or coa loyalty program. they found a match, next time you want to come on, we'll give you a reduced rate, and the third time it's another reduced rate, so they will keep coming back and using the service. have a referral program. a give and get program. give somebody you're inviting to the site $10, but they're also getting $10. >> next is about getting certified. >> how do we get certification for minority contractors and business owners, the certification can sometimes take up to six months. how do we move that process forward on a speedy timeline. >> it is a long process, and it takes what it takes, and you have to make sure you dot all of
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your i's and cross your t's because you could get put back again. >> it's simple, get involved in local politics, know who the policymakers are, who is advocating for things like this in your community. people on council that are understanding that hey, if you can pay attention, we'll build the economy in our community. and that makes them look good. they'll push it through more quickly. >> this may be taking you six months, but once you have that certification, you need to know who to go to. >> i have a different approach. go to people with a certification and get tips and tricks through them. they can get you through the process as quickly as possible. >> thank you for all of this advice. >> to earn more about